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Avoid advertising pitfalls

June 2015

Avoid advertising pitfalls

June 9, 2015

Man with a bullhorn

Advertising plays a key role in your success in real estate. Make sure your ads follow the provincial guidelines so that you can avoid complaints and fines for false or improper advertising. 

Unsubstantiated claims such as, “I’m No. 1” are among the most common mistakes made in real estate advertising, according to the industry regulator, the Real Estate Council of Ontario (RECO).

The advertising guidelines set out by RECO are designed to protect consumers and help you avoid common advertising pitfalls. By reading and adhering to RECO’s ad guidelines, you will not only steer clear of trouble, but you will also build trust among the public.

Bruce Matthews, deputy registrar for regulatory compliance, notes that the council regularly receives complaints about improper real estate ads that do not meet the guidelines. He advises registrants to take the following steps before releasing an ad publicly. Review and assess the advertisement to ensure that:

  • It meets RECO’s minimum advertising requirements
  • Written consent has been obtained for content that requires it
  • Prohibited content, such as false or misleading claims, is excluded.

In 2011, RECO revamped its advertising guide and checklist for registrants to make both documents easier to understand. Matthews notes that, between 2010 and 2013, there was a 135 per cent increase in the level of compliance. “That’s a fairly impressive increase in such a short period of time,” he says.

Advertising compliance can be a tricky issue, Matthews says, because real estate “is an industry with a fair level of churn. Fifteen to 18 per cent of the population is consistently new. Of the 70,000 registrants in Ontario, 10,000 of those have been registered only two years or less.”

Non-compliance in advertising tends to occur more often with registrants who are newer to the industry, Matthews says, because “in trying to push the envelope, they cross the line.”

The biggest single problem that Matthews comes across in advertising is the failure to meet the minimum requirements: (1) to clearly and prominently identify the registrant, using the same name as registered with RECO; (2) to clearly and prominently identify the brokerage; and (3) to correctly describe the registrant according to title (e.g., salesperson or broker of record).

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“These are very simple things, yet they seem to be our biggest concern,” Matthews says. “If we could ensure that these minimum requirements were met, our compliance levels would be 50 per cent higher.”

The new guidelines are helping to improve compliance rates, he adds. “My sense is that right now, compliance has probably gotten a bit better.”

Since registrants are early adopters of technology, Matthews says, the guidelines now mention electronic advertisements, and there is also a social media advertising guide.

“With social media, we encounter the same issues, just on a different platform,” Matthews notes. “The guides are there because we want to instil good practices as registrants develop their advertisements.”

Failure to comply with the guidelines means registrants can be brought before a RECO disciplinary panel for breaking the Code of Ethics; they can be brought to court for breaching the Real Estate and Business Brokers Act 2002 (REBBA); or RECO can revoke or refuse to renew their registration.

“It’s vital to follow the rules and make sure you stay on the right side of all laws and regulations,” says Nancy Bloom, a Toronto REALTOR® of 27 years and an OREA instructor.

Incorrect or misleading statements can occur in different types of ads, she notes, including newspapers, flyers, billboards or online advertising.

“People don’t think the same guidelines apply online, but they do,” Bloom says. “They may think it doesn’t matter if they use a nickname instead of their full name on their Facebook page, but RECO doesn’t see it that way.”

Some types of advertising errors could be as follows, says Bloom: advertising a “sold” price without written permission from all parties involved; running an ad for property that has already sold just to get names of prospective buyers; using confusing language, such as “new roof,” rather than “re-shingled in 2013”; and undocumented claims, such as “best property” or “guaranteed investment.”

“RECO is clear,” Bloom says. “You can’t run an ad knowing that a property has already been sold, you can’t use confusing terms, and you can’t make claims that you can’t justify.”

She recalls seeing a registrant’s ad boasting of properties he had sold 25 years ago, which could be deemed misleading, she says.

"It’s best to prevent those problems in the first place by making sure all ads are reviewed carefully beforehand.”

“If an advertisement is misleading, it affects the public’s perception of our whole industry,” says Bloom. “If consumers have a negative experience as a result of an ad, they will share that with others. It’s best to prevent those problems in the first place by making sure all ads are reviewed carefully beforehand.”

Nicole Koteff is a lawyer and REALTOR® who recently joined the Toronto brokerage where her husband has worked for 20 years. They are now operating as a full-service team. She encourages real estate brokers and salespeople to scrutinize their ads before publishing or posting them.

“We must be sure we use plain language, because our words are taken at face value,” says Koteff. “The public relies on the industry to be truthful when it comes to their biggest investment.”

“If the public can take what they read at face value and be comfortable in interpreting promotional statements based on their plain meaning – in other words, what would a reasonable bystander think -- then that serves us REALTORS® well in the course of doing our jobs. Consumers need to be able to take our accuracy for granted.”

One of Koteff’s pet peeves is seeing unsubstantiated claims about performance made by REALTORS® in their advertising.

“If the ad says ‘I’m No. 1 in the area’, which area is it? Tell me how you arrived at that ranking; give me data to substantiate it,” Koteff says. “As a person walking by a billboard that makes that kind of claim, I need to know how the claim is defined; I don’t want to have to guess.”

As a lawyer, Koteff has heard her fair share of negative jokes about lawyers, and she wants to prevent those in the real estate profession from being similarly insulted.

“I don’t want people to generalize,” she says. “Upholding the reputation of our industry is a group effort. We should not generalize, and neither should our ads.”

Koteff recalls her all-time favourite real estate ad, one that followed the rules and managed to be humorous at the same time.

“The ad was displayed on a bench in a bus shelter and it had a picture of the REALTOR® on it with the words, “#1 Agent in whatever town it was*,” annotated with an asterisk. The copy attached to the asterisk read, “*According to My Mother.”

Tips for Compliant Advertising:

1. Plan your ads carefully. Follow the RECO guides and checklist.

2. Take the time to do things properly; it becomes a habit and you don’t have to think twice about it.

3. Make sure your claims are specific, accurate and are backed up with proof.

4. Ask your branch manager or broker of record to review your ads; it’s good to have a second pair of eyes evaluating them.

Sources: Bruce Matthews, Nancy Bloom, Nicole Koteff. 

(Note: At the time of production, Bruce Matthews was nearing his last day at RECO. The comments expressed by him in the article reflect RECO’s current position on advertising in real estate.)

Story by Elaine Smith.

Download a text-only PDF of the June EDGE

Editorial Policy: The REALTOR® EDGE newsletter is produced 11 times a year by the Ontario Real Estate Association. The newsletter aims to provide practical and useful news and information about the real estate industry to members of the association. The opinions expressed in the newsletter are not necessarily those of the publisher. Submissions from the real estate community are welcome, including letters to the editor, opinion pieces, events and news. The newsletter reserves the right to edit, based on space restrictions and/or suitability, and/or to refuse submitted material for inclusion in the newsletter without reason. All rights reserved. Reproduction in whole or in part without the express written permission of the publisher is prohibited. Contents are copyright of the Ontario Real Estate Association. 

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Ray Ferris

I wouldn’t have become president of OREA if it wasn’t for the top-notch training developed by OREA’s Centre for Leadership Development.

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